Urban Renewal District Tax Statements

The Hermiston Urban Renewal District is appearing on property tax statements for all properties within the city this year for the first time, which is causing confusion among many taxpayers. The difference is due to a change in accounting at the County Assessor’s Office which is required by a statewide change resulting from a Multnomah County court case. This change does not impact how much property owners owe in taxes.

“The internal accounting of how revenues are collected and distributed has changed, but the total property tax bill that people owe is unchanged,” said Mark Morgan, Assistant City Manager. “I think the intention is for transparency, but frankly it muddies the waters.”

The best way to understand the change is to consider a hypothetical example:

If a new restaurant is constructed in the downtown and adds $1 million in taxable value to the urban renewal district, then the restaurant owes approximately $22,000 in property tax. Previously, that increased revenue was diverted directly in to the urban renewal district rather than going to the other overlying taxing entities. Now, that increased revenue is collected normally, and on the back-end, the other taxing entities owe $22,000 back to the urban renewal district. What is now showing on peoples’ tax statements is their share of what is being paid back to the urban renewal district.

“It’s important to remember that if there was no growth in the urban renewal district’s value, then there would be no extra revenue generated from the area, and then the other taxing entities would owe nothing back to it; in which case the amount shown on people’s statements for the urban renewal district would be zero” Morgan said. “Despite the multiple new moving parts, the businesses and properties located within the Urban Renewal District are still the ones paying for its operations.”